Friday, February 20, 2009

Denny's Grand Slam Giveaway a Hit

Denny's Grand Slam Giveaway a Hit

With 2 Million Diners

Restaurant Says It Exceeded Estimates at Total Cost of $5 Million

CHICAGO (AdAge.com) -- Score one for beginner's luck. Denny's first Super Bowl spot, which offered free breakfast to America, seems to have put bums in seats. The restaurant claims it surpassed its estimate that it would serve up to 2 million people during today's eight-hour Grand Slam giveaway. And all for the low price of $5 million.

Even early in the day, a very unscientific poll made it appear that many Denny's restaurants were giving away upward of 1,000 breakfasts.

Photo Credit: AP

"The response has been even better than we thought," said John Dillon, VP-marketing at Denny's. "We thought we were going to have a great day, and we had an awesome day. The response from customers both existing and new guests, as well as our staff and the restaurants, we couldn't have asked for more." The company estimates that the entire promotion, from Super Bowl ad buy to food costs, will total about $5 million.

Darren Tristano, exec VP, Technomic, a Chicago-based food-industry consultancy, described a turnout of 2 million as "pretty good." And since that breaks down to more than 1,000 Slams per restaurant, he said, "they must have been turning tables pretty fast."

"But given the state of the economy, it's not surprising," he said. "A free meal is a free meal."

For the uninitiated, Denny's Grand Slam meal consists of two pancakes, two eggs, two sausage links and two pieces of bacon. In other words, it's a little more pricey than the usual giveaways.

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"This definitely raises the bar on the giveaways we've seen in the last year or two, and brings it up to the $6 level," said Mr. Tristano. Fast-food and fast-casual concepts such as McDonald's, Starbucks, Dunkin' Donuts, Taco Bell and even Ben & Jerry's have experimented with freebies to boost awareness or sales of new items.

Mr. Tristano added that the chain accomplished its feat despite the inconvenience associated with a sit-down breakfast at Denny's compared to other breakfast options. "It's not just driving through at McDonald's for a cup of coffee," he said. Many of the chain's 1,541 restaurants are located in the suburbs, and a Tuesday breakfast could have been hard for those rushing to work or already there.

But even early in the day, a very unscientific poll of Denny's restaurant made it appear that many restaurants were giving away upward of 1,000 breakfasts. Two Chicago-area Denny's said they had given away about 1,000 Grand Slams, a Lexington, Ky., Denny's said it had been more like 900, one in East Brunswick, N.J., said it had given away close to 2,000, and a Detroit Denny's said it easily surpassed 2,000.

Although food costs are generally about 30% of the retail price, Mr. Tristano said a Grand Slam probably costs Denny's between $1 and $1.50. It sells for $5.99. "That's' why they spent the money to get you in their seats." However, cannibalization can be a problem in promotions like these. Mr. Tristano said that many folks who showed up at Denny's planning to pay for their breakfast this morning may have opted for a free Slam.

Still, the promotion appears to have been effective based on most accepted ROI measures. Two million-plus breakfasts easily exceeds the 1% benchmark of giveaway success. Sunday's game had about 98 million viewers.

Denny's, which is caught in the same slump as the rest of the casual dining industry, is on a mission to revive the sit-down breakfast. The Grand Slam breakfasts are its best-selling item, with about 12.5 million served each year.

"The Grand Slam has always been a Denny's favorite," Denny's CEO Nelson Marchioli said in a statement. "This free offer is our way of reacquainting America with Denny's real breakfast and with the Denny's brand. You don't know the real Denny's unless you've been in our restaurants in the last several years, experiencing the quality of our new menu items and our service first-hand."

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